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Loonie below 80 cents US for first time since 2005
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CTV.ca News Staff
Date: Wed. Oct. 22 2008 6:26 PM ET
The Canadian dollar sank below 80 cents US for the first time in three years on Wednesday, while the TSX found itself down nearly 560 points.
The loonie -- which hit an all time high of 110.31 cents US in late 2007 -- finished the day at 79.92 cents US, down 2.47 cents from Tuesday.
The loonie hasn't closed below 80 cents US since mid-2005.
Shaun Osborne, currency analyst TD Securities, said the Canadian dollar is weak in comparison to other major currencies.
"It's been really quite a turbulent few weeks for the Canadian dollar, we haven't seen moves like this since in the foreign exchange markets for a number of years - since the early 1970s in fact," Osborne told CTV Newsnet on Wednesday.
The dollar took a hit as oil prices also dropped dramatically, falling US$5.43 to US$66.75 a barrel.
In Toronto, the S&P/TSX composite index retreated 558.92 points to 9,236.88, following a 456-point drop yesterday.
In New York, the Dow Jones industrial average fell 514.45 points to 8,519.21 after losing 232 points on Tuesday.
In Britain, the FTSE 100 index of leading shares was down 188.84, or more than five per cent, to 4,040.89.
Germany's DAX 30 fell 4.46 per cent and the Paris CAC 40 lost 5.10 per cent.
In Asia, Japan's Nikkei 225 stock average fell for the first time in three days, closing 631.56 points down, or 6.79 per cent, to 8,674.69.
Hong Kong's Hang Seng was down 5.2 per cent, while South Korea's main index shed 5.1 per cent.
The market downturn comes as media reports in Japan said Toyota Motor Corp. will post its first decline in annual global sales in a decade.
"The credit crunch seems to be behind us, and we are shifting focus to corporate earnings and economic conditions, and clearly both are deteriorating," Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong, said Wednesday.
In the U.S., bellwether corporations such as chemical manufacturer DuPont Co., Sun Microsystems and Caterpillar Inc. added to recession fears after they downplayed their prospects for the coming months.
"The overarching theme here is that the world may be getting into a recession," BNN's Michael Kane said Wednesday in Toronto.
On Tuesday, the Bank of Canada said the global economy appears to be heading into a mild recession, led by a U.S. economy already in recession.
With files from The Associated Press
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I applaud the budget, even though Health Care and education may stay unscathed. Sadly this cannot last and I worry to later this year where cuts will become enviable. If anything, this provides the Wildrose Alliance plenty of ammo when an election is called.
Comments are now closed for this story
MORE REGULATIONS NOW.
said
Markets way up one day and way down the next...
Pretty emotional times in the markets. Oil prices go down, market confidence go down, TSX go down.
OPEC wants to further gouge consumers by stepping back oil production so prices go up, then markets go up.
My aunt Gertrude just caught the measles...markets up or down?
When some things in life such as Wall St control too much of us, it's time for regulation!
Roger T
said
Personal saving comes before the economy!
Shares man
said
Ike
said
Simon Shaw
said
Hmmm (Ottawa)
said
Scene
said
Dennis Robertsn
said
Rene
said
From where I sit I don't believe the global economy will settle until governments all over establish a new regulatory system for investments. Of course we may not want this as it would just be another reason for governments to use the opportunity to erode our freedoms. But at least all of the fear that exists today would be assuaged.
michael from ottawa
said
Jim
said
That's why it's time for people to realize that the investment Canada is making in the oil sands is senseless. Canada needs to look at developing our economy in and environmentally friendly manner.
Regardless of if it's a Liberal, Conservative or NDP idea, we need to give incentives to green companies that create jobs, and penalize companies that harm our environment.
Jaid in Toronto
said
That's life, but eventually, their time will come too.
Cameron
said
Is it any wonder the Liberals got their clocked clean when the savant Dion tried to impose a new tax in this nightmare?
Hide the razor blades because we ain't seen nothing yet!
liz ottawa
said
Blake
said
I think of it more like this:
What *kind* of regulation would make life smoother?
Example: I regulate the speed of my car with the accelerator & brakes. A graph of my speed as I cross town on a busy day looks like the recent stock market trends IF city engineers are NOT doing their jobs.
But what if they are thinking clever and they regulate flow in bottleneck areas so I hit a series of green lights?
Even if they only manage slow flow in those bad areas, I am happier (because I am at least MOVING) than if they just leave it a mess.
Regulation that makes life smoother should be salable even to skeptics - no speeding off corners!
LEPEW
said
I'd rather buy Canadian made or grown products any day of the week. ...
Exiled Canadian
said
With OPEC getting ready to cut production on Friday, we should expect to see the price of oil, loonie and TSX rise a bit but analysts are expecting that consumer demand will still decline so all three should come back down shortly thereafter.
BTW, the weaker Canadian dollar is also because the US dollar is getting stronger again. The Euro was also down vs. the greenback.
The sky is falling
said
I was working in Fort McMurray in 2001 when gas was 68c/L and oil was $18 a barrell but we were building one of 4 $3Billion projects and the oil companies did not blink an eye....
$60/barrell is a myth, but it sure keeps the prices inflated
Paul in NS
said
That being said it time to chane. The big question is how to we change , we have to buy gas. If the oil is not sold to us , it will be sold to some one else , the oil companies know this .
just as a note , I think we spend more money on bank charges .... 1.50 for a debit charge , come on !!!
The banks in canada are making record profits
The oil industry makes a lot of political contributions !
hense very little regulation on pricing !
Vinny in kingston.
said
Sylvain
said
What I See
said
Tim
said
Here's to low gas and a low dollar!!
REGULATE AND ENFORCE - STOP SHORTING NOW
said
Speculators and hedge funds are having a field day in these times shorting and bouncing the markets.
When the dummies that are supposed to govern decide to govern instead of sitting on their fat asses we might get some where until then this gets crazier by the day.
JP in Ontario
said
As for those complaining about the value of the dollar...If you cant afford to go because of a change in exchange rates...YOU CANT AFFORD TO GO AT ALL!!! A change in the value of the dollar should not cause you to not be able to afford to go.
As for those ...complaining about the price of gas at the pumps...Canada has a commodity based economy right now, oil is one of those commodities. A low dollar helps exports, as companies can buy canadian goods cheap, this helps canadian companies grow and create jobs, this in turn causes an influx of money, and will help stimulate the economy.
Relax People. Examine your finances, reduce your high interest debts, or at least shift them to lower interest rates. Reduce your credit spending. Examine whether or not you truly need that new car or house, and hold on to your investments. The road ahead is rocky, but not impassible.
Anthony from NS
said
Some places it's under a dollar a litre! can you say inconsistancy? i mean sheesh our gas prices should be around 0.96$/litre or lower. I mean this is quite ridiculous oil falling like a stone and gas not falling fast enough to match it.
To hell with the oil companies making their record profits; we need to stop getting gouged everytime we go to a gas pump.
Frunk
said
DR
said
Before you go bashing the oil sands you might want to do some homework and see for yourself just how much money is pumped to all provinces from these projects. ...So many fellow Canadian love to bash the oil sands, but I never hear anyone bashing the money coming from the oil sands. Also keep in mind that it is no greener to ship oil from the other side of the world.
John Royle, Ontario
said
Robin the Hood
said
jay
said
D'AGUIAR
said
Canada and pick-up properties cheap, with what little money they can save from the Financial thieves In the U.S.A., those days are finished now...in LA,California they will be leasing electric cars soon, so these people are just trying to scare everyone, if you have investments, liquidate some assets. I am thinking about selling everything I have and rent and collect a welfare cheque like everyone else, why work, why pay mortgage, why pay taxes,why keep money in the bank, it is all a game, and I am getting tired of this crap. I feel sorry for the younger generation growing up in this system, now I see why most Canadian born children leave this country and go to other parts of the world when they get educated, in there own system they are kept like hostages. ....
Johnson Mapple
said
Nick in Gatineau
said
A little bit of history.
You might remember in the early 1990's when Canada opened its doors to normal citizens for investment. They allowed the regular joe to invest himself rather than be forced to invest through a broker. All the banks began having investment accounts where you had to have 25 k minimum, 10 k minimum, etc. Now brokerage houses offer their buying power but you do the actual buying.
When the doors were first opened, those same insitituions said that it would cause volatility because the individual did not know what he or she was doing. Those institutions believed that only they knew how everything worked.
So the governments came up with full and fair disclosure laws - forcing everyone to trade the same way. (Nortel's ex-CEO Roth, tried to bypass those laws by selecting media)
Since then Risk has become the biggest commodity of them all - bigger than oil, gold, pork futures, etc.
If you ask why there has been a large variance in market share, or a stock price, the answer should never be 'because of Market forces.' That is a sign of misinformed IR and PR - They should be fired. Any well-informed IR or PR can and should give you an answer.
Erin
said
MuskyBuck
said
I haven't seen a better, 'I told you so', in my life time.
Hey what do you get when the year is 2008, the country is being run by politicians who believe, 'resource base' is the way to go.
We won't put any stock and trade into refining any of our resources, we'll just export them for easy cash.
In fact, we'll base our entire country on the Exxon business model, redirecting less than 1% of total profit on renewables, innovation and research.
Welcome to Canada!!!
Where the Tar Sands is held up like a shining grail. A section of land that produces dirty oil and costs us Canadians our water and natural gas to do that.
Now, perhaps we might have caught some apathetic Canadians attention.
Maybe possibly we have the opportunity to get our current 1950's model of economy into the front cortex of those living here that were too selfish with their own backyard interests to start paying attention.
Please do, unless you enjoy this.
JP
said
This is actually quite good news, along with the falling oil prices.
Nick in Gatineau
said
Weather, taxes, tariffs, embargoes, terrorism, wars, all have an effect on the price. All are considered risks and when taken into consideration, the price of oil goes up or down.
Use to be that if there was a terrorist attack in Israel, or that the Israeli army sent missiles into a territory, the price would automatically go up $ 1.00 to $ 2.00. Now a tropical storm does the same thing, Piracy along the african coast does the same thing, guerilla wars, drug wars, all do the same thing, change in political power such as a democratic government in the US also does the same thing. (Republicans in power = higher prices in oil and gas)
Then you have the mysterious US military daily consumption which is 4 times more than global consumption yet the US still has the same amount of oil reserves as it did in the 1960's.
Has this consumption been taken out as irrealistic by those who assess risk ?
Ken - Calgary
said
steve
said
Zwinky
said
It has always struck me odd that corporations can suddenly post huge losses, have layoffs and rob their employees of pension funds all while the top echelon have reaped huge rewards in the preceeding couple of years.
Talk about cooking the books.
More oversight, regulation and prosecution of wrongdoing will help everyone except the cheaters at the top. It's time they ceased to be the only ones whose futures matter to our governments.
Ken
said
MuskyBuck
said
To all of you that believe a dollar is still a dollar here in Canada, try being a freaking manufacturer like me!!!!
Try to understand what it feels like to buy raw material to import in and finish for sale in Canada.
Try to understand your costs just went up 30% freaking percent in a week!!!!!!!
...Tell me just exactly what does Alberta give when it comes to the amount of money being made by raping your backyard, poisoning all the people living in and around the Tar Sands?...
You all think your backyard is all that needs to be considered. Just your worries, just your opinions.
Try thinking like a Canadian, try thinking of this country and all your fellow man....
Stop thinking like an American!
Mike from Toronto
said
Jake
said
I believe it's the place to be.
Alex (Toronto)
said
Roger the Grey
said
roughneck in northern AB
said
Anonymouse
said
1. Everybody uses everybody with excuses and blaming the others.
2. It's a ping pong tennis match effect [take your pick] the seesaw will eventually hit bottom hard when the losers will be thrown off the play.
3. The world leaders are meeting to figure out who will lose out!
4. Many lost their jobs, they are selling their stocks to pay the bills [save their foreclosures] you dimwits!
5. After all the money is gone, bankruptcy is the last order of the day!
Have your nice end of financial lives!
ARJAY
said
I find it amusing that the Republicans are accusing Obama of being a "socialist" because he wants to reinstate the tax on higher earnings (above 250,000), a tax that Bush abolished, along with 4,000,000,000 cut to taxes on oil companies- who really need the money, I suppose).
Apparently Obama is going to "raise your taxes" - yeah, if you are in the top 5% of earners.
Meanwhile, the Republican president has to impose "socialism" in the form of nationalizing banks to save capitalism from itself.
Gee, maybe if we'd had more regulation in the first place, a more "socialist" policy regarding markets, we wouldn't be in this mess right now.
It isn't Sweden that's causing a world-wide recession, is it?
It's rigged.
said
Canada is being kept down by its subaltern class.
pat
said
My sister lives in Montana. There is a law in place that does not allow the stations to put up their prices until they get their next shipment of oil. No lets rise the gas price because a hurricane MAY inpact production. Time to stop price goughing!!!!
Jim in Montreal
said
What the heck am I missing here? Oh yeah...getting screwed...I forgot!
Cambob
said
Steve B
said
JYS
said
ping
said
Wendy In Montreal
said
Scott ONT
said
Rebecca
said
Mike from Canada
said
PVT
said
Matt the Commuter
said
On the up side: those of us who work in the US and live in Canada just received a 20% pay increase. Gotta love that.
Zhimmy
said
CHEERING!
Joe In Montreal
said
KB in GTA
said
I agree with your comments. I fully suspect that large manufacturers/exporters are playing in the FOREX market, artificially devaluing the CAD.
I suppose we should be comfortable with $.60 loonie vs USD? Anyone ever mention the Canadian Peso lately? Be afraid....be very afraid
JimT
said
Mr Chillz
said
Clem
said
You don't have to be a rocket scientist to understand that.
Pete
said
retireby45
said
Niagara George
said
Steve assured us our banks and our economy are strong. It is the US economy that is weak and in trouble.
The fact that our dollar is plunging in relation to the American dollar couldn't possibly be a sign of the world economists disagreeing with our prime minister.
Harper was wrong... but then it got him elected, so he's happy. Those who believed his story were wrong, but they will say it is a world situation and not his fault. That may have some truth, but everything he says about it is his version of the truth.
So far, I've been right on:
- other countries are investing in their environment... see yesterday's article about the EU.
- It is still too early for new investors to buy into the stock market... too much volatility and the bottom is still coming.
- Our banks needed a buyout (no matter what Flaherty called it) and they will face more problems.
- The debt will grow under the Cons... Harper has announced that a deficit is possible. (Take that to mean, absolutely certain!)
But, whose keeping track. :-)
Being stolen from - Ottawa
said
I think I need to change careers and go work for a gas company so I too can be greedy and steal other peoples money. With all the talk of the economic turmoil going on, these gas companies are taking advantage of the distraction to keep their prices artificially inflated (even more than before)...and not for a second will I believe that "it takes time" for the lower oil cost to translate to the gas station because we all know that it doesn't work the other way. The minute - no, SECOND - that oil prices go up, we see it at the gas station. How come the prices at the pump aren't dropping as fast as oil is??
MuskyBuck
said
For the same reasons the US doesn't.
Over a hundred years ago, the RBC group approached both the Canadians and the US and said to them this:
Why are you printing your own money? Why don't you let us print your money and in return well give your country and unlimited credit line.
Here's where the deal got really juicy. None of the people in power needed to pay it back.
Instead RBC said to them, your citizens will pay it for you.
"How could this work", our politicians said.
RBC told them that they would institute a federal tax which would then be handed over to the RBC group as payment on the debts interest.
So over a hundred years later, the debt incurred by the nation is still there.
And we continue to pay federal income tax.
The biggest scam heist in the history of capitalism.
Kelly O
said
JP in The Hammer, Vancouver Island , BC
said
The US dollar rasing - not sure why - that country is BROKE- another 20 yrs and the American dollar will be worthless- The US governmnet baile dout the banks- and now it is so far in debt it will take a century for them to see black again
MW
said
This is wonderful news and the lower the Loonie the better. My company's sales are 93% export related and this helps tremendously. The last three years were very difficult.
Rob in BC
said
mike hansquine
said
Drop in the interest rate holds inflation and slows down the on -coming recession.
They are right the Recession will be mild in Canada.
Keeping our Loonies low protects and increases Exports and slows down the recession.
Where Canadians will feel it the most is at the Import level..Especially US products, prices will rise sharply until the US recession comes well under control in the US and that will be later this year in the second half of 2009. Let‘s continue to watch the Exports, our jobs, and watch Spending closely. Buy Canadian , Made in Canada.
Be prepared !After the US elections Watch the Free Trade Agreement being re-negotiated.
Expect the US to become energy self sufficient reducing their imports for Oil, Gas and ELECTRICITY. California is moving in that direction already.
Good Government will do well for Canadians and the Loonies will adjust accordingly.
Doug BC
said
"What I See" should know it is not that Canadian business "would rather" sell in the USA.The fact is that most of them must.The market in Canada is simply to small to support anything other than small business.The would go broke if they only had Canadian customers.In fact all of Canada will suffer without export markets.The trick here,is to manufacture things that can be exported.buy at prices people can afford to pay.Not an easy task in a country with high costs for everything.Energy,labour,transportation,etc.
The value of the Can$ is a mixed bag.Low dollar = higher prices,but more work for people who export.High dollar = better prices but higher costs fpr our exports,and job losses in manufacturing.
Global economics are very complex,and constantly changing.Canadas small economy can do little to have an impact.The best we can do is lower debt,raise productivity,and redduce costs.In that way,we can adjust to changing market conditions,ans mitigate the damage when recessions do come along,or currency values change.
In this environment,lower debt is a huge advantage for both individuals,and our country.
John W.
said
Well then you want to blame the fall of the Euro, Oil, New Zealand Dollar, and Australian Dollar on the Conservatives too.
Smarten up 2 Diff scenario that no Gov. in the world has control of and I thought that the Liberal were Blaming Conservative Gov. for not doing anything when the Dollar went up.
How to keep the opposition Happy?
nc
said
The oilsands company were building huge projects decades ago, and did not worry about oil prices being too low.
Kathy
said
Naji M.
said
Fraser
said
When dealing with a corrupt system that encourages scarcity, this creates wars. This specific monetary system has outlived its use. We need a resource based economy to which every need is considered, not a monetary system that enslaves by focusing only on the problem. This situation has nothing to do with humanity's well being.
Dave in Newington
said
I enquired at the bank today for the exchange rate for the GBP,French franc and german mark and they were all VERY good...the GBP being about $2...the lowest I remember.
The reason for this is it seems the currencies in the rest of the world are dropping even more than our dollar...
Mebbe try Europe instead of the States :-)
Marc Coquitlam B.C.
said
Tech
said
As for prices at the pumps, sure it criminal but we are very much at fault. 90% of Canadians live in cities yet our public transportation is dreadful. We build large inefficient houses in suburbs which means we all need cars and a lot of heat oil to heat our homes. If we had built our cities correctly we could all jump on the subways, street cars and buses. The oil companies do not drop prices because they know we will have to fill up once a week.
F from Alberta
said
I'd like to know why everyone is so worried about the price of gas at the pump right now? I don't think that should be everyone's primary concern. As well, shouldn't everyone be happy because high pump prices will discourage people from driving, and thus make us more green?
If people want to help right now they should be consolidating loans, saving, and avoiding impulse purchases. If people keep living on credit the way they are they will be the proverbial drowning men pulling everyone else down with them. People talk about corporate greed, but it seems more like a case of consumer greed. Many people think they deserve that new car, flat screen tv, sub-prime mortgage, etc; and none of them stop to think if they can afford it.
Roy
said